Glasgow City Council Decides Not to Appeal

Yesterday, Glasgow City Council decided that it would not pursue permission to appeal to the Supreme Court against the Court of Session decision in HBJ Claimants v Glasgow City Council [2017] IRLR 739.

The Court had allowed the claimants’ appeal against rulings by the ET and EAT that the Workplace Pay and Benefits Review (“WPBR”), the job evaluation scheme introduced in 2007, was not a thorough and analytical scheme in compliance with s 1(5) of the Equal Pay Act 1970 and further that there were reasonable grounds to suspect that the scheme was unsuitable to be relied upon under s. 2A(2)(b) of the EPA. The decision could bring to an end litigation which began over a decade ago with predominantly female claimants, cooks, cleaners, carers and clerical workers claiming equal pay with almost exclusively male jobholders such as street sweepers, refuse collectors, refuse drivers, gardeners and road workers, but the Council is facing a bill likely to run into hundreds of millions of pounds.

Before the WPBR was introduced, male manual jobs received “productivity bonuses” of between 30% and 60%. The claimants were never offered or paid “bonus”. A hearing in 2009 to decide the validity of the bonuses settled part-heard with payments made without admission of liability but the Council later conceded that the payments had been discriminatory. In 1999, Scottish Councils negotiated the Single Status Agreement known as the Red Book. The agreement amalgamated and standardised pay and terms and conditions for manual and clerical workers but also sought to ensure that men and women were paid equally for the same work, whether rated as equivalent or of equal value. It was widely accepted that male “bonus” was in reality usually basic pay, was discriminatory and should be discontinued.

The WPBR was a bespoke and complex scheme rather than the template (albeit optional) Red Book scheme. In essence, grade was determined by assessing eight factors, using an “allocation tool kit”. The grade determined the employee’s core pay. The Council then assessed five specific working conditions, each of which carried points. Points meant prizes, namely an additional payment although it did not affect the grade. As a result, the comparators still earned considerably more than the claimants, even though their bonuses had been stopped. Those who did lose money were deemed to be red-circled as losers and their pay was protected for three years. However, although the claimants had been entitled to equal pay with the comparators before Single Status (the “bonus” being, in reality, basic pay), protection was neither considered nor paid to them.

The ET dismissed both the claimants’ pay protection claim and their WPBR challenges. The EAT allowed the claimant’s appeal on pay protection but dismissed the WPBR appeal. In 2017, the Court of Session heard the appeal and gave judgment in two tranches. On 30 May 2017, (Glasgow City Council v Unison Claimants [2017] IRLR 739) it dismissed the Council’s cross-appeal on pay protection on the grounds that whilst pay protection was a legitimate aim, the Council had never considered extending pay protection to women despite knowing that the bonus had been discriminatory. The newly elected SNP Council said that it would accept the judgment and would negotiate with the claimants.

On 18 August 2017, the Court of Session handed down the second tranche of its judgment (HBJ Claimants v Glasgow City Council [2017] IRLR 993), upholding the claimants’ appeal on the WPBR. It held that the scheme was insufficiently analytical to comply with the EPA and the Council had not satisfied the burden of proof in showing that it did. Although it was not strictly necessary for disposal of the appeal, the Court also held that that the claimants had satisfied the burden of proof on them to demonstrate that there were reasonable grounds to suspect that the WPBR could not be relied upon.

This decision meant that none of the thousands of claimants was bound by the rating under WPBR and were entitled to bring equal value claims against their former pre-Single Status comparators, who had continued to earn significantly more than – worse, that some claims went back more than a decade with interest running at 8% throughout the period. The Council sought permission to appeal from the Court of Session, which was robustly refused early this month.  Now that the Council has voted to abandon further avenues of appeal, it will have to negotiate with Action4Equality, the organisation set up by solicitor Stefan Cross, and with Unison, as both represent groups of claimants. If agreement cannot be reached, the alternative is further litigation, this time deciding whether the claimants do work of equal value to their comparators. This will incur yet more costs for the Council and may well be seen as postponing the inevitable and incurring additional back pay and interest. In addition, the Council will have to redesign its job evaluation scheme in order to avoid future equal pay claims.

Cloisters are proud to have been involved throughout this case. Daphne Romney QC conducted the case on pre-Single Status bonus schemes and appeared in the ET and EAT in a case establishing that claimants working in so-called arms-length organisations (“ALEOS”) were entitled to bring equal pay claims against the Council as an associated employer (Fox Cross Claimants v Glasgow City Council). Jason Galbraith-Marten QC conducted the pay protection and WPBR claims in the ET and Robin Allen QC and Jonathan Mitchell QC appeared in the EAT. Jonathan Mitchell QC also appeared in the Court of Session in both the Fox Cross Claimants case and the 2017 appeal.